Exam 8: Factors Affecting the Contractual Relationship

Indicate three situations where the courts will presume a relationship to involve undue influence.

In order to succeed in suing for a misrepresentation, that misrepresentation must have been in writing.

Indicate under which circumstances the remedy of rescission might not be available.

The Weyburn Farmers' Co-op contracted to sell a carload of grain to Mr. Takemori for $2,000. The co-op assigned, in writing, its contractual right to receive the $2,000 to the Royal Bank, to which it was indebted. The Royal Bank gave written notice of the assignment to Takemori. Unknown to the buyer and the seller, at the time of the contract the grain had been destroyed because of a train derailment caused by the negligence of the train conductor. On these facts, which of the following is true?

Explain what is meant by an "involuntary assignment".

According to Woods v. Hubley, a transaction can be set aside for unconscionability in certain cases. Which of the following would not be relevant to that determination?

Kassem was a real estate agent with his own firm. Because his agency was new in a competitive field, he hired the company of Barrett and Barrett Ltd. to advise on an advertising strategy and to design ads for the newspaper and for brochures. Jack Barrett, senior employee, was handling the market research, and the employee Armstrong was doing the illustrations. When the work was complete, the ads went to press; unfortunately, after the printing, it was discovered that in all the ads and in every brochure "Kassem" was spelled "Kassim." Armstrong had made the mistake in his copy. On these facts, which of the following is true?

Explain what is meant by "privity of contract".

Outline the restrictions on the ability of a person to claim non est factum.

In the case Whighton v. Integrity Inspections Inc., the plaintiff had retained the services of an inspector to check the condition of the building. The inspector had assured them that the home was in good condition. Upon moving in, the plaintiff discovered major problems in the home. What did the Court find?

Joe owned an apartment building and entered into a contract with Sam whereby Sam would operate that apartment building, but the proceeds from the rent and profits would be distributed among Joe's children. This is an example of what kind of an agreement?

Keri went to Crandon's computer outlet with her brother Paul, who was buying a laser printer. While she was waiting for him, she saw a poster saying the store was collecting funds for a special computer for a student recently disabled in an accident. The seller induced Paul to buy the model "X" printer by stating as a fact that the printer could interface with his Macintosh clone. Paul paid $900 for the printer. Also, Keri gave $15 to the student fund after the seller confirmed he was collecting for the student's computer. Later Paul and Keri learned that neither statement was true the printer didn't interface with Paul's computer and the store was doing nothing for the student and that the seller didn't believe that either statement was true when he made them. On these facts, which of the following is true?

Although Zlotnic had been in business a long time, he had been forced to borrow heavily in the last few years. When his debt reached the limit of his line of credit, $100,000, the manager of the Regal Bank called him in for a talk. Subsequently, Zlotnic sold his house for $250,000 to the Johnsons. He contracted to buy another from the Scotts. From the proceeds he anticipated receiving from the Johnsons, he assigned $200,000 to the Scotts, the purchase price of Scott's house, and assigned $50,000 to the Regal Bank to reduce his debt. The assignment to the Scotts was in writing; the assignment to the bank was not. The Scotts gave written notice of the assignment to the Johnsons on March 1, the day the money was owed to Zlotnic. Johnson verified the assignment and paid out the $200,000 to the Scotts. On March 2, the Regal Bank gave written notice of its assignment to the Johnsons. Unfortunately, at that time only $45,000 was owing to Zlotnic because the Johnsons had paid $5,000 to the Canada Revenue Agency for Zlotnic. On these facts, which of the following is true?

What is the status of the doctrine of privity today?

Indicate what must be present in order for an assignment to qualify as a statutory assignment.

Mrs. Sharp, the owner of a restaurant, induced the Morissons to buy the business by a misrepresentation; the invoices made her costs appear less than they actually were, and thus her profits more than they actually were. On these facts, which of the following is false?

Explain what is meant by the "parol evidence rule".

An assignee is "subject to the equities", means that a negotiable instrument can never convey more than existed between the original parties.

In which of the following instances would the court most likely hold the contract to be void on the basis of a mistake?

Misunderstanding occurs when each party has a different understanding of the terms of the agreement, in which case the courts apply a reasonable interpretation of the contract.